Ratings agency Moody's has signalled a series of downgrades for European airlines as they try and contain the impact of Covid-19 to their balance sheets.
Moody’s has downgraded low cost carrier EasyJet to Baa2 from Baa1 and Lufthansa to Ba1 from Baa3, with the latter on review for another downgrade. Moody's has placed all ratings from both airlines on review for downgrade.
It has also placed IAG on review for downgrade.
Moody's described the combined credit effects of Covid 19 and the oil price shock as “unprecedented” and noted that passenger airline sector has been one of the sectors most significantly affected given its exposure to travel restrictions and sensitivity to consumer demand and sentiment.
Moody's said it anticipated that the airline industry will require continued and further support from regulators, national governments and labour representatives to alleviate pressures on slot allocations, provide indirect or direct financial support and manage airlines' cost bases.